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One of the most important – and perhaps overlooked – variables in establishing franchise operations in a new country is how to get paid by foreign masters operating in different currencies. It’s fair to say most domestic U.S. franchisors (operating in a world where the U.S. dollar still rules) don’t have a lot of experience in international currency exchange.
In a session on international franchise development at last week’s Franchise Leadership & Development Conference (Oct. 17–20 in Atlanta), panelist Russ Sumrall (SVP, International Strategic Development for Church’s Chicken and Texas Chicken) acknowledged the difficulty in getting paid in U.S. dollars from about half a dozen countries where those brands operate.
Perhaps this new report from Flywire can help – either in getting paid, or in warning those seeking to expand overseas to look before they leap. An 8-page white paper, “What franchisors need to know about cross-border payments: Considerations for getting paid quickly and cost-effectively from global franchisees,” is here to help.
From the introduction: “In this white paper, we define some of the most important terms around international payments and explore some considerations, challenges, and questions to ask when pursuing an international franchise strategy to digitize and ease cross-border payments processes.”
Topics covered include: FX 101, an introduction to foreign exchange terminology, laws, and regulations; compliance with regional and local requirements; different payment methods; transaction security and privacy; cost and complexity of managing multiple banking relationships; hedging currency risk; geopolitical risks and issues; and more.
As noted in the report, “Going international and receiving international payments is rarely as simple as opening a bank account in another country. Everyone wants brand expansion, but not the complexity associated with cross-border payments.”
For a free download of the white paper, click here.